Expected Family Contribution Affects Tuition Support

Based in Sand Springs, Oklahoma, Frank Mamola serves as a financial advisor at Edward Jones, where he manages investments for more than 350 households. Frank Mamola helps clients with investments, retirement planning, and college planning, among other considerations.

Many parents want to help their children with college tuition, and financial advisors can help parents with all the complications of this process to pursue the right financial paths. Parents should be aware of the Expected Family Contribution (EFC), which refers to the amount of money each family is expected to spend on tuition before financial aid is granted. Financial aid will essentially cover the rest of the tuition costs. The higher the EFC, the less federal need-based aid, such as Federal Pell Grants or subsidized student loans, the student will receive. Students will still generally be able to apply for unsubsidized loans to make up the difference. However, there are many ways for parents to start saving money for their children’s tuition through savings accounts such as Coverdell ESAs, 529 plans, Roth IRAs, UTMAs, and UGMAs. Parents are encouraged to work with financial advisors on setting up these kinds of accounts and help their children prepare for college.